No one wants to impose capital losses on their voting base

There is no political will or incentive to “solve” house prices in Auckland or even around the world. When most households having nothing outside of their home in the way of retirement assets, writing down the value of that “asset” basically impoverishes them when their labour market earnings are on the decline.

No city in New Zealand is world class nor on the same level as Sydney or London or New York. House price to income multiples will fall because of their relative over-valuation when you think about the bundle of goods attached to an Auckland house at some point, but trying to predict when is futile. Under-estimating the political power of one group of people in society and their sheer relentnessness in exercising it is the ultimate sin of columnists.

Housing affordability is a problem that can never be solved because there are simply too many vested interests in ensuring that house prices never fall and if they do fall fast, enacting policies to bail out the same group of people who would be outraged if anyone else ever received a bail out! #irony